Earnings call transcript: Enity Holding AB’s Q3 2025 performance highlights growth

Enity Holding AB reported a strong performance in its Q3 2025 earnings call, with the loan book increasing by 10% to SEK 30.5 billion and an adjusted operating profit rising 19% to SEK 163 million. The company’s stock experienced a 1.17% increase, closing at SEK 95.88. Enity’s strategic investments and market leadership in alternative mortgage lending across the Nordic countries were key discussion points.

Key Takeaways

• Loan book grew by 10% to SEK 30.5 billion.
• Adjusted operating profit rose 19% to SEK 163 million.
• Stock price increased by 1.17%, closing at SEK 95.88.
• Continued focus on mortgage lending for underserved segments.
• Exploring expansion into new Northern European markets.

Company Performance

Enity Holding AB demonstrated robust growth in Q3 2025, with a significant increase in its loan book and operating profit. The company continues to capitalize on its position as a market leader in alternative mortgage lending across Sweden, Norway, and Finland. The integration of Bank 2 and investments in technological platforms for scalability have further strengthened its competitive edge.

Financial Highlights

• Loan book: SEK 30.5 billion, up 10%
• Adjusted operating profit: SEK 163 million, up 19%
• Net interest margin: Stable at just over 4%
• Adjusted return on tangible equity: 21.4%
• Cost-to-income ratio: 43% (adjusted)
• Credit loss level: 0.26%

Outlook & Guidance

Enity is targeting an 8-10% annual growth in its loan book and aims to maintain a return on tangible equity of approximately 20%. The company is considering expansion into new Northern European markets and potential acquisitions, including the remaining shares of Uno Finans. Continued investments in technology and automation are expected to support these growth ambitions.

Executive Commentary

CEO Björn Lander highlighted the company’s strategic positioning, stating, "We are operating in a market and segments with untapped potential." He also emphasized the success of Enity’s market entries, saying, "We have launched three markets from scratch and built up a very strong business." Reflecting on the company’s profitability in Finland, Lander noted, "We turned into profit this quarter, five years after launch."

Risks and Challenges

• Economic conditions in Finland remain challenging, potentially impacting loan growth.
• Changes in tax deductibility could affect marketing strategies and consumer behavior.
• The Nordic housing market shows varied performance, requiring careful navigation.
• Potential net interest margin reduction in 2026 could affect profitability.
• Expansion into new markets carries inherent risks and requires strategic planning.

Q&A

During the Q&A session, analysts inquired about Enity’s timeline for market expansion and expectations for net interest margin changes. The company also addressed its marketing strategy in light of tax deductibility changes and provided insights into credit loss expectations.

Enity Holding AB’s Q3 2025 earnings call highlighted its robust financial performance and strategic initiatives, reinforcing its leadership in the alternative mortgage lending sector.

Full transcript - Enity Holding AB (ENITY) Q3 2025:

Conference Operator: Welcome to the Enity Q3 2025 report presentation. For the first part of the conference call, participants will be in listen-only mode. During the questions-and-answers session, participants are able to ask questions by dialing #5 on their telephone keypad. Now I will hand the conference over to CEO Björn Lander and CFO Pontus Sardal. Please go ahead.

Björn Lander, CEO, Enity: Good morning, everyone, and welcome to Enity Holding and this presentation of the third quarter 2025. My name is Björn Lander. I am the CEO of Enity, and I am here today together with our CFO, Pontus Sardal. We will go through the presentation of the third quarter first, and if you have any questions, you can either use the chat or unmute at the end of this session. I’ll start with a very short introduction to Enity. We are a leading pure-play Nordic mortgage bank operating across the Nordics. We founded our business in Sweden more than 20 years ago, Greenfield, and have built up a very strong and robust business since then. We took the concept to Norway in 2010, have Greenfield built up a strong business.

In Norway, and finally we launched our third market, Finland, in 2020, have also built up now a very strong and robust business in Finland. We are operating under three consumer brands. We have Blue Step Bank in all three markets, and then we have an additional brand in Norway called Bank 2. That is a bank we acquired in October 2023. We decided to keep the consumer brand Bank 2, but the bank as such has been fully incorporated and integrated into Enity. We are running a third consumer brand called Sixty Plus Banken. That is a Swedish brand where we offer an equity release product. In addition to that, we also have invested into two loan brokers, one Norwegian, one called Einoms Finans. Are kind of 100% owners, so it is a fully owned subsidiary. We have a minority interest in Uno Finans.

That’s a broker operating in the Norwegian and the Finnish market. The purpose and the goal for us is basically to make the housing market accessible to more people. We typically help customers rejected by the traditional banks for various reasons. It could be that they have a different type of employment. It could be people with a short credit history, people with credit remarks, self-employed, or retirees as an example. Over to the third quarter. I’m very pleased to see the development. It’s a very strong performance, a very good result. We saw the loan book grew double-digit, up more than 10%. The portfolio amounted to SEK 30.5 billion. That in combination with a very strong profit increase, we saw adjusted operating profit increased by 19% and amounted to SEK 163 million.

This is driven by, again, first of all, very strong organic growth, stable net interest margins, and also very strong cost efficiency in the company. We posted very low and stable net credit losses, 0.26%. We had an adjusted return on tangible equity at 21.4%. We also saw a very good and positive development when it comes to the cost-to-income ratio. If we adjust for Einoms Finans, we posted 43% in terms of cost-to-income ratio. Overall, a very good quarter and very strong numbers. We offer an unmatched value proposition. If you look on the right-hand side, there is a strong combination of high growth, high returns, to very low cost of risk. Why is that? Again, first of all, we offer mortgages only, so 100% secured lending.

We are operating in a market and in a segment which is under-penetrated, so there is a high growth driven by secular trends. We are operating in the Nordics, which is a resilient and robust region when it comes to mortgages. We have invested and developed quite a lot when it comes to our technical platform to support scalability. At the same time, we also have a very robust and diversified funding in place supporting our growth ambitions. To that, also a very strong organization. All in all, a very strong value proposition. If we look at the market development, again, we saw a very solid development, 10% portfolio growth despite the subdued Nordic housing market. If we break it down a little bit and look at the different markets, starting with Sweden, we had a 5% portfolio growth despite the relatively weak market.

I think conditions are improving. We saw another rate cut from the central bank in Sweden. They lowered the rate from 2% down to 1.75%. We can clearly see that transactions and prices are picking up slightly, but there is still a lag, we believe, between the rate cutting and consumer confidence. If we go to Norway, we saw a double-digit growth again, so very strong performance. There are a couple of drivers. We saw another rate cut from the central bank in Norway, this time down to 4%. It is clearly still much higher than what we see in Sweden and Euroland, but this should be supportive moving forward. We can now capitalize from the combination of Blue Step Bank and Bank 2 since we have a very strong market position. We also.

See that the increased loan-to-value from 85% to 90% that came into force in the beginning of this year is also, of course, supportive to the numbers. Then Norway, the Norwegian housing market has worked pretty well during 2025. We saw a house price increase of about 7% during the first half, and that has now started to flatten out a bit in the third quarter, but still a well-functioning market, I would say. Last but not least, then Finland. High double-digit growth, very pleased to see the development. We are the only player in the market and building. Story, like we did in Sweden and Norway. The market as such is pretty weak. We have seen transaction numbers picking up a bit now in the third quarter, but house prices are still relatively flat.

Again, very pleased to see the kind of high growth we have in Finland. By that, I’ll hand over to Pontus.

Pontus Sardal, CFO, Enity: Great, thank you. Let’s go through the financials then. We had a loan growth of 10% adjusted for currency effect, and we had net interest income growing in a similar way, up 11% year on year, which means that the net interest margin has remained stable, just over 4%. This is in an environment where we’ve been seeing rate cuts in both Czech and Euro. We believe that the rate cuts from the central banks have come to the end for this, and they will remain on this level for a foreseeable future now. We expect to see the NOK rates come down a little bit further, but much slower than was initially anticipated earlier in the year. Reported OPEX is up year on year. This is only due to items affecting comparability and the impact from consolidating Einoms Finans.

Einoms Finans was acquired during the second quarter, which has an impact when we consolidated of roughly SEK 20 million on the OPEX line and similar numbers on the revenue line. Items affecting comparability refers to retention bonuses that were put in place in connection with the IPO, and that affects the OPEX line SEK 27 million negatively. We have a positive item as well where we have recovered VAT, SEK 9 million. Those items affecting comparability we adjust for when we look at the adjusted OPEX. Also worth mentioning, I think, is that the third quarter has been favorable in terms of seasonality on the OPEX line as well.

If we consider this, OPEX is actually down in absolute numbers comparing to the same period last year, and this is the effects of the restructurings we did last year as well as the takeout of synergies following the acquisition of Bank 2. Which has then been very supportive to improved cost-to-income ratio. Forty-six percent reported and then adjusting for the consolidation impact of Einoms Finans, 43%, which is down almost 7 percentage points compared to the same period last year. Thus the impact from consolidating Einoms Finans is roughly 3 percentage points. Credit losses are stable in the third quarter, SEK 11 million. Stable to what we’ve seen in previous periods. We have seen portfolio migrating in a positive way where stage two loans are down 0.6%. Stage three loans are down 0.1% then. Positive quality migrations. This has also meant that we have not.

Built any further provisions during the third quarter. So it’s probably only write-offs that have impacted the credit loss line. The credit loss level measured over the last 12 months is 26 basis points. It’s still elevated compared to the historical levels that we’ve seen, which is then again partly due to that we had some more of non-recurring items in the first quarter, as communicated earlier. I think if we would look at the Q3 loss level on an annualized basis, that would be more in line with what we’ve seen over the last three years’ averages, around 15 basis points in credit loss level. So I think now if we bring all this together, we have an adjusted operating profit that is up 19% compared to the same period last year.

This is then due to strong portfolio growth, 10% at stable net interest margin, improved cost efficiency with an adjusted cost-to-income ratio then for Einoms Finans of 43%, and only slightly higher credit losses. In the quarter, we also have a negative impact from mark-to-market of hedging derivatives and liquidity portfolio, mainly hedging derivatives. Keeping in mind that that number was very strong in the second quarter, EUR 21 million, that is a bit of natural volatility in that. If we go to the markets then, start with Sweden, it is clearly a subdued property market. There are early signs of improvement, but recovery is slower, I think, than we expected earlier in the year. The outlook is definitely improving. We have seen a loan book growth of 5% in spite of this.

We have seen net interest income actually come down a little bit to last year. Margins are just under 4%, which is expected in the wake of that. We are now through a, or we’ve been through a rate cutting regime from the central bank where we believe that we have come to the end of that. They did the last cut down to 1.75%, and we expect rates to remain at this level for a foreseeable future. OPEX has developed in a strong way where the cost-to-income ratio is down from 45% to just over 40%. A very strong development in efficiency. Similar here, it is also driven out of the restructurings that we did last year, being able to reduce OPEX in the investment that we’ve done in technology and organization over the last three years. We have very low credit losses in Sweden.

I mean, for the period January to September, they’re literally zero. Over the last 12 months, it’s a zero credit loss level. For the year, it’s primarily due to that we’ve been able to do put-backs of provisions that have been created over the years 2022, 2023, and 2024. That’s good to see. We also see a positive development here in terms of stage migrations moving in the right direction. Bringing all this together, we posted an adjusted operating profit of SEK 71 million, which is up 3% to the same period last year. We go to Norway then. Clearly a more resilient economy, I guess you could say. I mean, we’ve seen a much more stable housing market, or actually a strong market, where property prices have grown, and we’ve been able to continue to grow our business and underwrite.

New loans in Norway. Earlier in the year, the LTV cap for mortgages was lifted. We believe that that has also been supportive in the growth that we’ve seen in Norway. Up 11% in local currency. Net interest income has grown even stronger. We have been able to remain on margins just under 4% over the last 12 months. Norway’s bank, as Björn was mentioning, they have also now finally, then I guess you could say, started their rate cutting regime and reduced the rate down to 4%. They’re a bit more cautious of the outlook. Though we expect rates to continue to come down in Norway, clearly much lower than what we anticipated earlier in the year. I think we have not really, I mean, this has not really yet translated into lower rates for our customers, neither on the lending side nor the deposit side.

There is clearly a bit of time lag still before Norway’s bank rate cuts will hit the consumers or will benefit the consumers, I guess you could say. Again, OPEX is down 11%, and we post a very strong cost-to-income ratio for the Norwegian business, 35%. Here, in addition to restructurings last year, we have the impact from the finalization of the integration of Bank 2 and the full takeout of synergies. In 2025, which primarily relates to the technical integration where we’ve been able to cut off the IT cord on the previous Bank 2 setup. It is also probably worthwhile noting, comparing Sweden and Norway, that a large part of the customer acquisition in Norway is through a broker network, which means that we post the cost for that is accrued for over net interest income. There are a bit of different dynamics here comparing the markets.

Credit losses in Norway, they are still elevated, both year to date and also in the quarter. We have also here seen slightly positive migrations of stage two loans. Again, it remains elevated. I think that touches back to my point previously on rate cuts and so on, that Norway, I mean, rates in Norway have remained elevated for a pretty long period of time. Rate cuts have started, yes, but they have not really materialized into the wallets of the customers. It is still a bit of a constraint there. Again, despite this, we post a very strong adjusted operating profit in Norway, just over NOK 90 million, up 21% to the same period last year.

If we go to Finland then, we are very pleased to see that we have now posted our first quarter with a positive result and adjusted operating profit of EUR 2 million. This is in an environment where the underlying conditions are clearly quite strained. It’s a hard-hit economy, Finland, no doubt about it. I think we’ve been successful in building out our offering in the Finnish market, and we’ve been able to grow our loan book in a nice way. I think we’ve also demonstrated the scalability of the platform now where we’ve been able to grow the loan book and the revenue line with basically unchanged cost compared to the same period last year. If we move to credit losses more specifically, the third quarter, we had EUR 14 million, close to EUR 15 million, in write-offs.

No change in provisions basically over the quarter due to kind of positive stage migrations, both stage two and stage three. This, I would say, is anticipated. What we’re seeing is that we are releasing provisions to offset the losses we are writing now. Those are provisions that we have been building over the last three years. Again, credit loss level remains a bit elevated compared to historical averages, so 26%. Keeping in mind that there are more non-recurring events, you could say, during the first quarter, as we have reported, that impacts the last 12 months ratio. I think it’s worthwhile looking at the quarterly rate, 11 million in losses, annualizing that, then we’re more on the historical averages around 15 basis points. Again, stage two loans down from 9.3% to 8.7%, and stage three loans down to 7.2%.

Moving in the right direction. On the funding side, we have fully funded the growth by deposits from the general public. We have not been active in the capital markets for a number of reasons, not the least the IPO process that we ran during the first half of the year. We have now returned to the capital markets where we’ve done two activities recently. In the quarter, we did issue NOK 200 million of senior unsecured bonds successfully. In October, we have refinanced a covered bond maturity of NOK 2 billion, and we issued NOK 1.5 billion at 49 basis points. Attractive. It’s good to see that. It’s good to be back on the debt capital markets, and it’s good to see that the pricing is good and attractive as well. There are no changes, no updates on the Moody’s issue rating.

It’s still the same, and it’s a stable outlook. In terms of regulatory ratios, LCR, NSFR, they are certainly well above the regulatory levels. We continue to maintain a conservative approach to our liquidity portfolio. If we then go to the capital ratios on the capital side, we posted a CET1 ratio of 15.1%, which is in the upper band of the target range to be 200-300 basis points above the regulatory required level. We’re at 280 basis points. We have in the quarter two events that impact the ratio. One that we announced in connection with Q2 was that we have now received an extended or additional exemption for strategic FX risk from SFSA, which has reduced risk exposure amount and improved the CET1 of SEK 500 million. We have a self-imposed.

REA add-on or risk exposure add-on due in anticipation of the acquisition of the remaining shares in Uno Finans in the first quarter 2026, which then reduces the CET1 ratio and puts it within target. I think also worth noting is that the requirements have come up a little bit, and this is primarily due to that the growth is still tilted towards Norway, where buffer requirements are higher than in the other markets. With that, I hand back the word to Björn. Thank you for that, Pontus. We will have a quick look at the financial targets. We have three targets. We have been through them during the presentation. Again, we have a loan book target of 8%-10%, measured as growth annualized. We have a target on adjusted return on tangible equity that should be approximately 20%.

We have delivered slightly ahead of that in the third quarter, so a little bit more than 10% organic growth and 20.6% in terms of root year to date and 21.4% in the third quarter. As Pontus just mentioned, we have a common equity tier one target of 200-300 basis points over regulatory requirements, and we are in the upper band of that target in the third quarter. Looking a little bit ahead, we have a couple of things. I mean, first of all, we will continue to focus on our core business. That is top priority one for the company. Grow core operations in Sweden and Norway. We are operating in a market and segments with untapped potential, and we will get support from a scalable technical platform, well-established mortgage brands, and also kind of a robust and well-diversified funding.

We will, of course, continue to expand and accelerate the growth in our Finnish operations as well as in Sixty Plus Banken, where we do see good potential. In addition to that, we will start to assess whether there are opportunities to go beyond the Nordics and enter new markets in Northern Europe. I mean, we have a strong track record now of launching markets. We have launched three markets from scratch and built up a very strong business. We will assess whether there are opportunities to continue to expand geographically. We will continue to focus on efficiency in the company. We will continue to invest into our tech platform as well as new automation initiatives to continue to scale. This has been.

Kind of a key priority for us over the last couple of years, but it will continue, and we will adapt to new technology and make sure that we also can scale in the future. The last thing I wanted to mention is when it comes to distribution. As we have been through, we acquired Einoms Finans during the spring. We have also a minority stake in Uno Finans. We will acquire the remaining shares of Uno in the first quarter 2026, so that will become a fully owned subsidiary. In addition to that, we will assess whether there are opportunities to continue to find and make M&A in the broker channel, especially in the Swedish market. The new legislation for brokers in Sweden, which means that brokers providing unsecured loans must hold the banking license, creates opportunity for us to explore possible acquisitions.

That is also to be part of the agenda moving forward. By that, we will ask and open up for any question. If you wish to ask a question, please dial pound key five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key six on your telephone keypad. The next question comes from Patrick Bratellius from ABG. Please go ahead. Yes, good morning. A few questions on my side. I thought we could start with the costs, as that was significantly lower than I expected, and also it seems like lower than consensus. Can you talk a little bit about these temporary effects again and help us to specify them? Also talk about these seasonal effects that we see in Q3, because if I look back in 2024, it seems like.

Costs are down like 11% in Q3, and then it increased rapidly by 34% in Q4. What can we expect in seasonality in terms of the upcoming quarter? If we start there on the cost side. Yeah, I’ll add, Patrick. I mean, the obvious one is the VAT recovery. That was SEK 9 million, where we were able to recover VAT that was paid previously in connection with the acquisition of Bank 2, and that we deem as an item affecting comparability. I think you have, you got probably, I mean, what you noted in terms of seasonality. I think the other items that affect the Q3 is that we’ve seen kind of release of holiday pay provisions and things in the third quarter. That goes for Enity and that goes for Einoms Finans as well.

I think it’s typically a low, kind of a low OpEx environment. I think you should expect the OpEx to be higher or up from the third quarter in the fourth quarter then. Kind of comparing what you noted, same year or same periods last year. Okay, that’s a fair run rate assessment of the growth quarter over quarter. Yeah. Thank you. Can we expect any further VAT recoveries? No, no, this is really a one-off, and that’s why we also have it as an item affecting comparability. Thank you. Then moving on to this last slide before Q&A, as you put it in the slides package and it was also highlighted in the CEO wording, could you elaborate a little bit about this topic of opportunities of entering additional Northern European markets? Which markets are you referring to here?

Could you talk about which, in your view, looks attractive? Potential timeline of this, how long before entering a region before you reach break-even, approximately given the platform that you now have? Could you elaborate a little bit, please? Yeah, yeah, I can do that. First of all, I mean, this is still in a very early stage. I mean, we just started the assessment. I am not going to name any specific market today. We are going to look, I mean, in Northern Europe to assess whether there are kind of opportunities for us to launch this concept. I mean, there could be two ways of doing it. Either we do it greenfield, like we did in Sweden, Norway, Finland, or where we might find an attractive M&A where we can kind of assess whether that could be attractive or not.

It’s really in a very, very early phase, and I don’t expect this to happen in the near future. Quite a lot of work to do there to understand the opportunities. Okay, thank you. If you were to enter a country on a greenfield basis, given that you have a recent example now with Finland, how long before going in, before reaching profitability? It’s a hard question to answer before we have all the kind of the assumptions on the table. I mean, typically, if we go back and look at what happened in Norway and Finland, I think now in Finland, as just Pontus mentioned, we turned into profit this quarter, five years after launch. It has been a pretty bumpy road with COVID and these kind of macro changes. Norway, I think we delivered profit a little bit faster than that.

If we would go greenfield, I would expect it will take a couple of years until we would be profitable in those markets. Okay, thank you. As a last question, I would turn to net interest margin. You highlight that in your CEO wording. We have also previously talked about the NIM coming down as you go after lower risk segments. You talked about 3.5-4%. As you highlighted here in the CEO wording, when can we expect that to be visible in the numbers, that you come in below 4% as you have been above 4% for such a long time? As you have more info on that on your side, when can we expect that? Yeah, I mean, I think it will not be a drastic kind of drop, of course, but we believe that we will slowly and gradually kind of.

Decrease the NIM a bit. I think that will happen in 2026. That is how we should think about it. Thank you. Also, if we were to see a drop in NIM given lower risk segments, what should we expect on the loan loss side? I think you should, I mean, I think we’ve been averaging 10-20 basis points. I mean, we’re on the high end now, and there’s just a few kind of non-recurring. I think that is the range. We do not believe that it will materially move that number. It should be in the range around 15 basis points on an ongoing basis. Okay, fair enough. Thank you. Thank you. The next question comes from Andreas Hakansson from SEB. Please go ahead. Yeah, good morning, everyone. Just a bit more general question.

I’ve been listening to the radio in Sweden and hear that you’re running this commercial about the tax deductibility on unsecured debt will be removed. Could you tell us, do you feel that you get any traction on that? Do you have a feeling that the target clients are understanding this change and see the potential in your products? It’s a good question and well spotted. I mean, we have produced new marketing material, I mean, just a couple of weeks ago. This is very, very new material that was launched basically two weeks ago. It’s a little bit early to draw too big conclusions, but I think the general kind of understanding is that people understand it and they also, it drives some kind of attention to it.

But again, we have to give it a little bit more time before we can draw too big conclusions from that. Okay. We’ll ask again in Q4. Just a little bit of a technical question. I mean, loan loss provisions were very low in the quarter, or very good in the quarter. Do you expect or should we expect some sort of seasonality in a pickup in the fourth quarter, or should it be just like any other quarters with the same drivers? Yeah, no, I think we, again, I think we’re back on kind of historical levels now if you look on a quarterly basis. I think that’s a fair kind of expectation as we go forward as well. I think the elevated level, I mean, last 12 months, the 26 basis points, they’re obviously influenced by a couple of things.

Firstly, we’ve seen we had kind of quite adverse stage migrations earlier in the year, and then we had a couple of kind of more of kind of non-recurring, if you like, items in the first quarter that stemmed from the acquisition of Bank 2 then. That kind of added to the run rate. I think it’s fair to expect them to be on more historical averages going forward. Okay, that’s it from me. Thanks very much. Thank you. As a reminder, if you wish to ask a question, please dial pound key five on your telephone keypad. There are no more questions at this time, so I hand the conference back to the speakers for any written questions and closing comments. All right, thanks a lot, everyone, for dialing in to this conference call or earnings call. See you in.

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